US June Jobs Seen Encouraging as Eurozone Inflation Data Tests ECB Rate Hike Bets

Key Facts

With markets closely watching global central bank moves, ING expects the US June jobs report to be encouraging, supported by falling gasoline prices that help ease inflation pressure. According to the Dutch bank, the release will provide a gauge of labor market strength despite economic slowdown. Meanwhile, ECB rate hike expectations will be tested by upcoming eurozone inflation data.

This comes as recent data showed Canadian inflation rising to 3.2% year-on-year in May, above the 3% forecast, per market data. In contrast, the eurozone services PMI improved to 48.9 in June but remains below the 50 expansion threshold. Central bank speeches, including Lagarde's on June 22, underscored continued caution on inflation momentum.

Markets await the US jobs report and eurozone inflation print in the coming week as key catalysts for monetary policy direction. A surprise in employment data could reinforce expectations for a Fed hold, while a higher-than-forecast eurozone inflation reading may support an ECB rate hike at its July meeting. The focus remains on whether easing price pressures and labor market strength will shape central bank policy paths.